Tens of thousands of solicitors could have to pay up to £25 a year to fund an anti-money laundering quango which the Law Society has said is not needed, it has emerged. Chancery Lane today sounded a new warning about the potential burden of Office for Professional Body Anti-Money Laundering Supervision (OPBAS), which comes into being later this month.
Responding to a Financial Conduct Authority consultation on how best to distribute the start-up and running costs of OPBAS, the Society said that the office must consult on its strategy, business plan and the level of fees.
The office, set up by the Financial Conduct Authority, aims to oversee the adequacy of supervisory arrangements at 22 professional bodies referred to as professional body supervisors (PBS). These include the Law Society and Solicitors Regulation Authority.
Each body will have a nominated senior manager responsible for carrying out due diligence. Each body will also be charged a fee to cover the office’s running costs, while a further cost will be added on top to account for ‘additional tasks’.
The FCA is proposing to charge an application fee of £5,000 for reviewing and processing applications from bodies that want to be added to the PBS list, along with a ‘fairly distributed’ annual fee. Its ‘working assumption’ is that OPBAS will need to recover £2.5m in 2018/19 and 2019/20 and £2m per year from 2020/21 onwards.
‘Using the data we have to hand, which we acknowledge may not be consistent, we believe the final rate might be within the range of £15 to £25 per supervised individual,’ the FCA said. Final rules will be published in February or March.
In today’s response, the Society says 85,000 solicitors, including wills, trusts and property practitioners, would fall under OPBAS's jurisdiction. ‘As one of the largest supervisors, the Society understands that it will be expected to bear a correspondingly greater proportion of OPBAS costs. These costs will be passed on to the profession through the practising certificate fee. It is incumbent upon OPBAS to keep the costs to be borne by the regulated population to a minimum.’
The Society added that the professional body supervisors will ‘wish to see a clear strategy and business plan put in place’ that will justify the costs. When the scheme was proposed last year, Chancery Lane said it did not believe the new quango would 'add value to the existing anti-money laundering supervisory regime'.